I’ll dispense with the usual comments reminding people that if the price of labor is forcibly increased, employers will demand less of it; resulting in low-income people losing jobs or seeing their hours cut. Rather, I will refer readers to the comments of economist Tom Woods on the subject:

Are they? How can they know? If they were worth more, other firms would have captured their extra worth by bidding them away from the fast-food industry and hiring them themselves. Then we can know they were “worth more,” at least in some other line of production.

Since no one else seems willing to hire them at their current wage rate, it seems to me that the very last institutions they should be angry at are the fast-food restaurants themselves, the only institutions on earth doing anything to improve their standard of living. Why don’t they protest all the places that pay them $0, having refused to hire them at all?

…

Articles written in support of the strikers claim the restaurants could increase the workers’ pay by raising the prices of their food. This gives the game away: the real constraint on these workers’ pay, as this concession inadvertently reveals, is erected by the consumers. So the logic here is: we can help some poor people by hurting other poor people (by charging them more for food).

In other words, if fast food places could raise their prices more, they already would have. But we as consumers have demonstrated we are not willing to pay more for the product. Therefore, if fast food workers want to blame anyone on their wages, blame consumers who dictate the price of the finished products, which in turn determines the price of the inputs (such as labor) used to create the products.

Incidentally, if you want to help poor people, why not just go ahead and do it? Why go the absurdly circuitous route of trying to make food more expensive (which in turn hurts other poor people)? Why not just seek out the working poor directly and help them? And why castigate the only institution in society that has lifted a finger to improve their material condition?

Answer: these people are all talk. They’d love to help everyone in the world, as long as someone else pays the price. These critics pay McDonald’s employees zero, but they are upset at McDonald’s, which gives them a paycheck.

Reader Interactions

Discussion

Low wages paid by some of America’s largest corporation is a form of welfare for major American corporation and America’s wealthest individuals like Mr Pope. Why should American taxpayers have to subsidize full time working citizens with food stamps, tax credits for low income families and health care because greedy corporation refuse to pay a living wage to hard working citizens?

Increasing the minimum wage to a living wage could actually *increase* employment – here’s how:

1) Those enjoying the increased wages could now better afford to eat out, or buy an iPad, or do or buy any number of things. This drives up demand which is the REAL creator of jobs, not low taxes.

2) Taxes could indeed be cut – as the need for DHS/DSS services decreases, those programs could be severely curtailed with some of the funds being diverted to other gov’t responsibilities such as education. So if lower taxes really do create jobs, you get a double whammy…

3) Those who need to work more than one job to make ends meet would be better able to cut back, meaning they’d have more time with their families (you are pro-family, aren’t you?) and also making available more jobs in the marketplace.

Remarkably, I do consider myself a libertarian/conservative. It took me a while to realize that the best way to reduce or eliminate government programs is to make them irrelevant. I’d rather see a living wage with a smaller government than what we have now.

Unfortunately, your analysis misses the mark by a wide margin. As alluded to in the original post, if companies are forced to pay higher wages by fiat and not as a result of improved productivity, they would have to pass along the added expense to consumers. The higher prices would decrease demand for the products and cause layoffs and cutbacks.

More specifically to your point, if somehow raising the minimum wage didn’t result in layoffs and cutbacks, but rather just translated into low-skilled people having more money to spend – how do you think that would effect prices? Of course, prices would rise, wiping out any possible gain from the increased wages.

Then we would be back to square one again, but now we would be saying a “living wage” needs to be $25 an hour due to the higher cost of living.

I share your desire for a more limited government, that’s why I don’t think government should criminalize peaceful labor agreements that happen to not meet their arbitrary minimum rate.

Brain, The raw capitalism you and Mr Pope lobby for is the same raw capitalism Charles Dickens wrote about, it’s also the same raw capitalism of the “Grapes of Wrath” John Steinbeck wrote about in 1939 and the injustice of such a cruel system of economic injustice. No corporation should be allowed to go public on any American stock exchange until they are paying workers a fair living wage allowing those workers to support a family to live unsubsidized by taxpayers, with food stamps, tax credits. Full time American workers should be able to afford modest housing, food, clothing, education for their children, transportation, health insurance, medical expenses and time to spend with their families. I truly do not understand the mind set of todays conservatives like yourself, lacking any sense of justice, humanity or a basic understanding of history or the fact countries like Norway, Sweden, Germany, The Netherlands, Ireland all have strong free market economies which are regulated for social justice producing free, educated societies with capital to spend and educated work forces. Your model of repressive control by wealthy individuals using money, gerrymander and corruptions has existed over and over in history as plutocracy ruled by tyrants, the Slave South, the Segregate South, Banana Republics, 1970s Argentina using government as a means to further personal power and wealth while exploiting the working citizens. Let Mr Pope, the Walton Family and the fast food owners stop being the recipients of corporate welfare by demanding corporations pay employees a wage which does not have to be subsidized by the American taxpayer.

What makes people doing a job a high school dropout can excel at think that they deserve the same pay that semi-professional people work 10+ years to achieve? Are you going to demand everyone not making $100k a year get double their current pay? Why the hell not?

David a “living wage” is one which can support a family without additional government subsides is not a middle class wage, however don’t think the jerk billionaires who inherited most of their wealth Art Popes, Alice Walton and fast food owners won’t do every thing possible to hold down middle class wages and benefits. If you receive a wage Civitas NC is working against your economic interest. The conservative movement of today is designed to protect the economic interest of people like Mr Pope not semi-professional people.

So a 17 year old entering his first job, should make a “living wage”, even though his mother & father each have $100K jobs?

Minimum wage is a racists policy. (see US history Jim Crow laws as well as apartheid South Africa.) 1st minimum wage laws were introduced by trade unions to prevent African Americans from competing with them – African Americans entrepreneurs were willing to do the job for less, which would undercut the trade unions. Thus trade unions demanded the government put in minimum wage laws -at a rate that the trade unions could afford but the the African American entrepreneurs could not.

An African American Heat & Air man cannot grow his business and hire a neighborhood kid, because the African American small business employer cannot afford to pay the required minimum wage (+ unemployment insurance, payroll taxes, etc –a wage of $5/hr, actually costs the employer about $8/hr). Result: African American Entrepreneurs cannot help lift their community out of poverty, crime, etc. And no-skilled kids wander the streets & join gangs, instead of getting a job & skills from the local African American Entrepreneurs. (Or are community African American Employers evil & greedy too?)

Minimum wage & “Living Wage” is a “rich” lobbyist & union construct to eliminate competition from small business owners.

So these “living wage” proponents are actually doing the bidding of the very people they claim to be against. Thus, we have a Wal-mart society, where only the rich can afford the labor costs and labor barriers are put in place to prevent the small business owners from growing, hiring and competing against the rich special interests & unions.

Isn’t it interesting that the “living wage” proponent’s hate for “rich” people is soo great, that they are willing to crush the small entrepreneur just so they can get back at the “rich”.

The “living wage” proponents want the poor to stay in low-skill jobs. They want the low-skill jobs to be soo attractive that the poor have neither the ambition, drive or time to fulfill their actual full potential.

“Living wage” proponents are essentially saying: “hamburger flipping is an enviable career, with which poor people should be satisfied.”

Civitas encourages you to leave your comments and feedback related to the articles posted here. Civitas reserves the right, in its sole and absolute discretion, to remove any comments, including but not limited to comments that include abusive, vulgar, threatening or harassing language, or personal attacks of any kind. Off-topic comments or gratuitous links that could be viewed as spam are also subject to removal at our sole discretion. Your email address will not be published. Required fields are marked *

Comment

Name *

Email *

Website

Save my name, email, and website in this browser for the next time I comment.